Gazans clean up as truce with Israel holds

GAZA CITY, Gaza Strip (AP) — Gaza residents cleared rubble and claimed victory on Thursday, just hours after an Egyptian-brokered truce between Israel and Gaza's Hamas rulers ended the worst cross-border fighting in four years.

The cease-fire announcement had set off frenzied late night street celebrations in the coastal strip, and raised hopes of a new era in relations between Israel and Hamas. The two sides are now to negotiate a deal that would open the borders of the blockaded Palestinian territory.

"Today is different, the morning coffee tastes different and I feel we are off to a new start," said Ashraf Diaa, a 38-year-old engineer from Gaza City.

However, the vague language in the agreement and deep hostility between the combatants made it far from certain that the bloodshed would end.

Israel launched the offensive on Nov. 14 to halt renewed rocket fire from Gaza, unleashing some 1,500 airstrikes on Hamas-linked targets, while Hamas and other Gaza militant groups showered Israel with hundreds of rockets.

It was the worst fighting since an Israeli invasion of Gaza four years ago.

The eight days of relentless strikes killed 161 Palestinians, including 71 civilians, and five Israelis. Israel also destroyed key symbols of Hamas power, such as the prime minister's office, along with rocket launching sites and Gaza police stations.

Despite the high human cost, Hamas claimed victory Thursday.

"The masses that took to the streets last night to celebrate sent a message to all the world that Gaza can't be defeated," said a spokesman, Sami Abu Zuhri.

While it is far from certain that Hamas will be able to pry open Gaza's borders in upcoming talks, the latest round of fighting has brought the Islamists unprecedented political recognition in the region. During the past week, Gaza became a magnet for visiting foreign ministers from Turkey and several Arab states — a sharp contrast to Hamas' isolation in the past.

Israel and the United States, even while formally sticking to a policy of shunning Hamas, also acknowledged the militant group's central role by engaging in indirect negotiations with the Islamists. Israel and the West consider Hamas, which seized Gaza by force in 2007, to be a terrorist organization.

Israeli Defense Minister Ehud Barak, meanwhile, defended his decision not to launch a ground offensive, in contrast to Israel's invasion of Gaza in the winter of 2008-2009.

"You don't get into military adventures on a whim, and certainly not based on the mood of the public, which can turn the first time an armored personnel carrier rolls over or an explosive device is detonated against forces on the ground," he told Israel Army Radio.

"The world's mood also can turn," he said, referring to warnings by the U.S. and Israel's other Western allies of the high cost of a ground offensive.

However, with the cease-fire just a few hours old, Israel was not rushing to bring home all of the thousands of reservists it had ordered to the Gaza border in the event of a ground invasion, Barak said.

Barak was defense minister during Israel's previous major military campaign against Hamas, which drew widespread international criticism and claims of war crimes.

The mood in Israel was mixed, with some grateful that quiet had been restored without a ground operation that could have cost the lives of soldiers.

Others — particular those in southern Israel who have endured 13 years of rocket fire — thought the operation was abandoned too quickly and without guaranteeing their security.

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Associated Press writer Amy Teibel in Jerusalem contributed reporting.

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Greek PM presses for deal on loan
















ATHENS, Greece (AP) — Greece has reacted with dismay to the European Union‘s failure to agree to release vital rescue loan funds for the debt-ridden country, with the prime minister warning it was not just Greece’s future that hangs in the balance.


The delay prolongs uncertainty over the future of Greece, which faces a messy default that would threaten the entire euro currency used by 17 EU nations.













Prime Minister Antonis Samaras stressed that Greece has done what its creditors from the EU and International Monetary Fund required. “Our partners, along with the IMF, also must do what they have committed to doing,” he said.


He said that “it is not just the future of our country, but the stability of the entire eurozone” that depend on the success of negotiations in coming days.


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“Rise of the Guardians” Review: Magic, but you’d better believe in Santa Claus
















LOS ANGELES (TheWrap.com) – There’s a really cool idea afoot in “Rise of the Guardians,” namely that Santa Claus, the Easter Bunny, the Tooth Fairy and the Sandman aren’t merely responsible for their little corner of children’s lives but are actually a super-team of “Avengers” proportions. Taking their cues from the unseen Man in the Moon, they protect children everywhere from evildoers.


There’s also a really tired concept dragging down the film, namely that new Guardians recruit Jack Frost isn’t sure that he wants to join up, and he doesn’t know who he really is – and he’s, basically, the umpteenth Joseph-Campbell-reluctant-hero who pops up in seemingly every kids’ movie and superhero epic. (Arguably, “Guardians” is both.)













And as much as I often found myself enchanted by this 3D animated film, based on the series of books by William Joyce, I couldn’t help noticing that this movie falls into a conundrum I like to call (with a tip of the hat to playwright Christopher Durang) “You didn’t clap loud enough – Tinkerbell’s dead.”


As an atheist (albeit one who loves Christmas movies), I get a little twitchy about films where children are made to feel guilty about not believing in things and people that don’t actually exist. So even though it’s nice to get a non-cynical story aimed at kids, in which open-heartedness and wonder are celebrated as virtues, this is another movie that paints itself into a theological corner by suggesting that those of us who question the existence of the Easter Bunny are at fault for all the world’s ills.


In this tale, the Guardians assemble for two reasons: to welcome Jack Frost (voiced by Chris Pine) into their ranks and to combat Pitch Black (Jude Law), a long-suppressed boogeyman who’s out to capture the Sandman (who never speaks, but is one of the movie’s funniest characters) and to replace his golden slumbers with hideous nightmares.


Santa (Alec Baldwin) – here made out to be the jolliest Russian stevedore on Earth – welcomes Jack to the fold and assures him that he can be a hero once he figures out what he’s made of. Less convinced is the Easter Bunny (Hugh Jackman), who has ongoing resentment against Jack for all those times that wintry weather has disrupted egg hunts.


And there’s the Tooth Fairy (Isla Fisher), who subcontracts most of her gig out to her army of pixies; one of the film’s interesting twists is to explain why children’s teeth are so valuable and what she does with them.


When the Guardians are zipping around the planet, invisibly enchanting children and ribbing each other, “Rise of the Guardians” has a real lift to it; first-time director Peter Ramsey knows how to pace the big set pieces, and he understands that anytime you can make characters fly around (or extreme-sled) in a 3D movie, audiences’ spirits will soar too.


All too often, however, the good stuff is interrupted by the extremely pat plot beats of Jack and his voyage of self-fulfillment, and those aren’t the only mistakes screenwriter David Lindsay-Abaire (“Rabbit Hole”) makes along the way.


There’s a major plot development that takes place off-camera, which gives a large chunk of the movie a “Wait, what just happened?” confusion that’s too much of a distraction.


The young’uns at the screening I attended were entranced for much of “Rise of the Guardians” (terrible title!), so parents can rest assured that its target audience will leave satisfied. But the best family films truly appeal to the whole family, and adults may find themselves asking, and fending off, too many questions to take the plunge into this fantasy universe.


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UN says an end to AIDS in sight
















LONDON (Reuters) – A United Nations report said on Tuesday that eradicating AIDS was in sight, owing to better access to drugs that can both treat and prevent the incurable human immunodeficiency virus (HIV) that causes the disease.


An aim to eventually end the worldwide AIDS epidemic is not “merely visionary” but “entirely feasible”, the report said.













Success in fighting the disease in the past decade has allowed the “foundation to be laid for the eventual end of AIDS” by cutting the death toll and helping stabilise the number of people infected in the pandemic, UNAIDS said its annual report.


Some 34 million people had HIV at the end of 2011.


Worldwide, the number of people newly infected with the disease, which can be transmitted via blood and by semen during sex, is falling. At 2.5 million, the number of new infections in 2011 was 20 percent lower than in 2001.


Deaths from AIDS fell to 1.7 million in 2011, down from a peak of 2.3 million in 2005 and from 1.8 million in 2010.


Sub-Saharan Africa is the most severely affected region with almost one in every 20 adults infected, nearly 25 times the rate in Asia, there are also almost 5 million people with HIV in South, South-East and East Asia combined.


“Although AIDS remains one of the world’s most serious health challenges, global solidarity in the AIDS response during the past decade continues to generate extraordinary health gains,” the report said.


It said this was due to “historic success” in bringing HIV programmes to scale, combined with the emergence of new combination drugs to prevent people from becoming HIV infected and from dying from AIDS.


Since 1995, AIDS drug treatment – known as antiretroviral therapy – has saved 14 million life-years in poorer countries, including 9 million in sub-Saharan Africa, the report said.


Some 8 million people were being treated with AIDS drugs by the end of 2011, a 20-fold increase since 2003. The U.N. has set a target to raise that to 15 million people by 2015.


Scientific studies published in recent years have shown that getting timely treatment to those with HIV can also cut the number of people who become newly infected with the virus.


UNAIDS said the sharpest declines in new HIV infections since 2001 were in the Caribbean and in sub-Saharan Africa – where new infections were down 25 percent in a decade.


Despite this, sub-Saharan Africa still accounted for 71 percent of people newly infected in 2011, underscoring the need to boost HIV prevention efforts in the region, UNAIDS said.


HIV trends are a concern in other regions also, it said.


Since 2001, the number of new HIV infections in the Middle East and North Africa was up more than 35 percent from 27,000 to 37,000, it said, and evidence suggests HIV infections in Eastern Europe and Central Asia began increasing in the late 2000s after being relatively stable for several years.


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Tel Aviv bus blast shakes Gaza diplomacy

TEL AVIV, Israel (AP) — A bomb struck an Israeli bus near the nation's military headquarters in Tel Aviv on Wednesday, wounding 10 people and complicating major diplomatic efforts to forge a truce between Israel and Gaza's militant Hamas rulers.

The attack came as U.S. Secretary of State Hillary Rodham Clinton shuttled between Jerusalem and the West Bank to help piece together a deal to end Israel's weeklong offensive against Palestinian militants in the Gaza Strip that has killed more than 130 Palestinians. Militant rocket fire into Israel has killed five Israelis. Clinton was due to travel later to Egypt, which is mediating in the crisis.

"What does it say about the future of the (truce) talks? I leave it to (the senior officials), but this doesn't add anything," Yitzhak Aharonovich, Israel's minister of internal security, told Army Radio.

The bus exploded around noon on one of the coastal city's busiest arteries, near the Tel Aviv museum, the district courthouse and across from an entrance to Israel's national defense headquarters.

The bus was completely charred, its side windows blown out and glass scattered on the asphalt. The wounded were evacuated and blood was splattered on the sidewalk.

"We suddenly heard a huge explosion and immediately knew it was a terror attack," said Nir Zano, 35. "I saw someone running in to carry out a woman who was injured."

Aharonovitch said the device was placed inside the bus by a man who then disembarked. The explosion took place while the bus was in movement, he said.

Police set up roadblocks across the city trying to apprehend the attacker.

"We strongly believe that this was a terror attack," said police spokesman Micky Rosenfeld. He said three of the 10 wounded were moderately to seriously hurt.

In Gaza, the Tel Aviv bombing was praised from mosque loudspeakers, while Hamas' television interviewed people praising the attack as a return of militants' trademark tactics.

No group claimed responsibility for the attack, but Hamas spokesman Fawzi Barhoum welcomed it.

"We consider it a natural response to the occupation crimes and the ongoing massacres against civilians in the Gaza Strip," he told The Associated Press.

Israeli Deputy Prime Minister Silvan Shalom, who heard the explosion from his Tel Aviv office, called it "an escalation."

The cease-fire efforts come with thousands of Israeli ground troops massed on the Gaza border, awaiting a possible order to invade.

After meeting with Israeli Prime Minister Benjamin Netanyahu in Jerusalem Tuesday night, Clinton conferred with Palestinian President Mahmoud Abbas in the West Bank on Wednesday morning and was due to travel later to Cairo, which is mediating in the crisis.

The two sides had seemed on the brink of a deal Tuesday following a swirl of diplomatic activity also involving U.N. chief Ban Ki-moon and Egypt's President Mohammed Morsi. But sticking points could not be resolved as talks — and violence — stretched into the night.

Israeli aircraft pounded Gaza with at least 30 strikes overnight, hitting government ministries, smuggling tunnels, a banker's empty villa and a Hamas-linked media office.

Dozens of civilians are among the more than 130 Palestinians killed in a week of fighting. Four Israeli civilians and a soldier have been killed by rocket fire — a toll possibly kept down by a U.S.-funded rocket defense system that has shot down hundreds of Gaza projectiles.

The Tel Aviv bus bombed Wednesday was relatively empty during the explosion, which explains the relatively low number of casualties. The bombing was the first in the coastal city since April 2006, when a Palestinian suicide bomber killed 11 people at a sandwich stand near the city's old central bus station. A bomb left at a bus stand in Jerusalem last year killed one person.

More than 1,000 Israelis were killed during the violent Palestinian uprising in the last decade in bombings and shooting attacks. More than 5,000 Palestinians were killed as well.

___

Associated Press writer Ibrahim Barzak contributed to this report from Gaza City.

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U.S. fiscal impact of great concern to Canada: Canada’s Harper
















TORONTO (Reuters) – Any fiscal problems that would significantly slow the U.S. economy would be of great concern to Canada, Canadian Prime Minister Stephen Harper said on Monday.


The United States needed a credible medium-term fiscal plan, Harper said at a business forum in Ottawa, adding that he was following the U.S. fiscal debate with “great interest.”













(Reporting by Solarina Ho)


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‘Trapped’ on Broadway? R. Kelly is working on it
















NEW YORK (AP) — Is Broadway ready for Twan, Sylvester, Pimp Lucius and “the package”? R. Kelly thinks so — and says he’s working to bring the wacky characters and plotlines in his even wackier “Trapped in the Closet” series to the Great White Way.


The superstar announced on Monday night that he’s had an offer to bring the cult classic to the stage, and he may even be in some performances.













“To transform it into a Broadway version, that’s what I’m working on,” he told a packed house at the Sunshine Theater, where he unveiled the latest chapters in “Trapped in the Closet,” which will debut on the IFC on Friday.


Kelly gave no other details about a possible Broadway adaptation of the wildly popular video opera. It got its start from a stirring series of songs Kelly debuted in 2005, which ended with a cliff-hanger. The songs captured so much attention, Kelly made an over-the-top video series about it that just got crazier and crazier as he added more chapters.


Kelly has often referred to “Trapped” as an alien, and on Monday, he said: “I’m glad to be one of the astronauts to take this thing to the unknown.”


He thanked the enthusiastic crowd for accepting the series, and admitted that he always wanted to act: “Somehow, I landed ‘Trapped in the Closet’ from being silly.”


He also joked about the ridiculous nature of the series.


“I’m just having a lot of fun. I don’t have a job so I sit in the studio all day and think of stuff to do and this is just something stupid I’ve done that’s been successful for me,” he said. “I’m having a lot of fun with it.”


The latest chapters introduce a few new faces, and like the others series, ends with a cliffhanger. While it’s taken Kelly five years to add these latest chapters to the series, Kelly says he won’t take as long to produce more.


“I want everybody to know I’ve got 85 chapters of ‘Trapped in the Closet’ waiting in the studio for y’all,” he said. “The chapters that are coming — the show, we call it — is going to exceed every chapter that you have ever seen.”


Kelly capped of the evening with a rendition of one of his biggest hits, “I Believe I Can Fly,” for the audience.


___


http://www.r-kelly.com


http://www.ifc.com


___


Nekesa Mumbi Moody is the AP’s Global Entertainment & Lifestyles Editor. Follow her at http://www.twitter.com/nekesamumbi


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Psychiatrist found accused Oakland college shooter mentally ill
















OAKLAND (Reuters) – A former nursing student charged with killing seven people at a Christian college in Oakland this year has been found by a psychiatrist to suffer from schizophrenia and unfit to stand trial, his lawyer told a judge on Monday.


One Goh, 44, is charged in Alameda County Superior Court with seven counts of murder and three counts of attempted murder in the April 2 shooting spree at Oikos University, where he once attended nursing school. He has pleaded not guilty.













The shooting spree was the deadliest at an American college since 2007, when a Virginia Tech University student killed 32 people and wounded 25.


Deputy Public Defender David Klaus said at a hearing in Alameda County Superior Court that a court-ordered psychiatric report concluded that Goh was “presently incompetent to stand trial due to his longstanding paranoid schizophrenia.”


A hearing on Goh’s competency was postponed until January 7 because a second psychiatrist, who the court also ordered to issue a report, was unable to interview the Korean-born defendant until a translator could be found.


Goh, who weighed 220 pounds when he was arrested a few hours after shooting, looked emaciated as he sat in a jury box in a red jail suit, his hands and feet shackled. Klaus estimated Goh, who refused food for four weeks after his arrest, had lost up to 75 pounds.


“I’ve felt strongly since the beginning of the case that he’s severely mentally ill,” Klaus said after Goh’s brief court appearance. “I believe that mental illness is, if not the direct cause, certainly the catalyst for this terrible tragedy that he committed.”


Klaus said the confidential psychiatrist’s report found that, based on interviews with family members, Goh has suffered from paranoid schizophrenia for nine to 15 years. He never sought treatment and has refused treatment in jail.


Alameda County District Attorney Nancy O’Malley, who has not yet decided whether to seek the death penalty, declined comment.


Authorities said they believe Goh became angry after he dropped out of the nursing school last year and administrators refused to refund his tuition. A Presbyterian minister from Korea founded Oikos University as a vocational school in 2004.


(Editing by Dan Whitcomb and Todd Eastham)


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Clinton heads to Mideast amid Gaza crisis

GAZA CITY, Gaza Strip (AP) — Efforts to end a week-old convulsion of Israeli-Palestinian violence drew in the world's top diplomats on Tuesday, with President Barack Obama dispatching his secretary of state to the region on an emergency mission and the U.N. chief appealing from Cairo for an immediate cease-fire.

Israel and Gaza's militant Hamas rulers have staked out tough, hard-to-bridge positions, and the gaps keep alive the threat of an Israeli ground invasion. On Tuesday, grieving Gazans were burying militants and civilians killed in ongoing Israeli airstrikes, and barrages of rockets from Gaza sent terrified Israelis scurrying to take cover.

From Egypt, U.N. chief Ban Ki-moon said he came to the region because of the "alarming situation."

"This must stop, immediate steps are needed to avoid further escalation, including a ground operation," Ban said. "Both sides must hold fire immediately ... Further escalation of the situation could put the entire region at risk."

U.S. Secretary of State Hillary Rodham Clinton departed for the Mideast on Tuesday from Cambodia, where she had accompanied Obama on a visit. Clinton is to meet with Israeli Prime Minister Benjamin Netanyahu in Jerusalem, Palestinian President Mahmoud Abbas in the West Bank and Egyptian leaders in Cairo, according to U.S. and Palestinian officials.

The U.S. considers Hamas, which has killed hundreds of Israelis in suicide and other attacks, to be a terror group and does not meet with its officials. Washington blames Hamas rocket fire for the latest eruption of violence and says Israel has the right to defend itself. At the same time, it has cautioned that a ground invasion could send casualties spiraling.

By Tuesday, 115 Palestinians, including 54 civilians, have been killed since Israel mounted an air onslaught that has so far included nearly 1,500 strikes. Some 840 people have been wounded, including 225 children, Gaza health officials said.

Three Israeli civilians have also been killed and dozens wounded since the fighting began last week, the numbers possibly kept down by a rocket-defense system Israel developed with U.S. funding. More than 1,000 rockets have been fired at Israel this week, the military said.

Netanyahu said Tuesday that Israel wouldn't balk at a broader military operation.

"I prefer a diplomatic solution," Netanyahu said in a statement after meeting with Germany's foreign minister, Guido Westerwelle, who is also in the region trying to advance peace efforts. "But if the fire continues, we will be forced to take broader measures and will not hesitate to do so."

Successive Israeli governments have struggled to come up with an effective policy toward Hamas.

Neither Israel's economic blockade of the territory of 1.6 million people nor bruising military strikes have cowed Gaza's Islamists, weakened their grip on the coastal strip or fire rockets at the Jewish state.

An Israeli ground invasion would risk Israeli troop losses, and could send the number of Palestinian civilian casualties ballooning — a toll Israel could be reluctant to risk just four years after its last invasion drew allegations of war crimes.

Still, with Israeli elections just two months away, polls show Israeli public sentiment has lined up staunchly behind the Netanyahu government's offensive.

Turkey's foreign minister and a delegation of Arab League foreign ministers headed to Gaza on Tuesday on a separate truce mission. Before setting off, Foreign Minister Ahmet Davutoglu signaled Turkey was in contact with Israel bout a truce — an important development given the two countries' chilly ties.

"We would be involved in all kinds of efforts if it amounted to saving the life of a single brother from Gaza," Davutoglu said. "We are determined to keep all direct or indirect channels (of dialogue) open."

Turkey's once-close ties with Israel frayed badly over the high civilian toll during Israel's 2009 war in Gaza.

With tens of thousands of Israeli soldiers dispatched to the Gaza border, awaiting a possible order to invade, the truce missions were all the more urgent.

Egypt, the traditional mediator between Israel and the Arab world, has been at the center of recent diplomatic efforts.

Israel demands an end to rocket fire from Gaza and a halt to weapons smuggling into Gaza through tunnels under the border with Egypt. It also wants international guarantees that Hamas will not rearm or use Egypt's Sinai region, which abuts both Gaza and southern Israel, to attack Israelis.

Hamas wants Israel to halt all attacks on Gaza and lift tight restrictions on trade and movement to and from the territory imposed after Hamas seized Gaza by force in 2007. Israel has rejected such demands in the past.

Resurgent rocket fire set off the Israeli offensive, launched with the assassination of the Hamas military chief and followed by hundreds of airstrikes on militant rocket launchers and weapons stores.

The onslaught turned deadlier over the weekend, as airstrikes began targeting the homes of suspected Hamas activists, leading to a spike in civilian casualties. Israel sent warnings in some cases, witnesses said, but in other instances missiles hit suddenly, burying residents under the rubble of their homes.

Hamas is deeply rooted in densely populated Gaza, and the movement's activists live in the midst of ordinary Gazans. Israel says militants are using civilians as human shields, both for their own safety and to launch rocket strikes from residential neighborhoods.

In one case, a senior member of the military wing of Islamic Jihad rented a small apartment in a 15-story high-rise of offices and news outlets. The militant, Ramez Harb, was killed Monday in a rocket strike that damaged the building.

One journalist said he and others were furious that Harb had apparently used their building as a hideout, putting others at risk. He spoke on condition of anonymity because he feared repercussions from Gaza militants.

Early Tuesday, Israeli aircraft targeted another Hamas symbol of power, the headquarters of a bank senior Hamas officials set up to sidestep international sanctions on the militant group's rule. After Hamas overran Gaza, foreign lenders stopped doing business with its militant-led government, afraid of running afoul of international terror financing laws.

The inside of the bank was destroyed and a building supply business in the basement was damaged.

"I'm not involved in politics," said the business owner, Suleiman Tawil. "I'm a businessman. But the more the Israelis pressure us, the more we will support Hamas."

Israel and Gaza's militants have a long history of fighting, but the dynamics have changed radically since they last warred four years ago. Though their hardware is no match for the Israeli military, militants have upgraded their capabilities with weapons smuggled in from Iran and Libya, Israeli officials claim.

Only a few years ago, tens of thousands of Israelis were within rocket range. Today those numbers have swollen to 3.5 million, as the militants' improved weapons reached Tel Aviv and Jerusalem for the first time this past week.

Hamas, a branch of the region-wide Muslim Brotherhood, is also negotiating from a stronger position than four years ago. At that time, Hamas was internationally isolated; now, the Muslim Brotherhood is in power in Egypt and Tunisia, and Hamas is also getting political support from Qatar and Turkey.

At home, too, the military offensive has shored up Hamas at a time when it was riven by internal divisions over its direction and the new Egyptian government's refusal to lift the blockade it imposed along with Israel after Hamas seized the territory.

This newfound backing contrasts radically with the loss of stature the Western-backed Palestinian President Mahmoud Abbas has endured as Palestinians lose faith in his ability to bring them a state through negotiations with Israel.

____

Teibel reported from Jerusalem. With contributions from Ibrahim Barzak in Gaza City and Suzan Fraser in Ankara, Turkey.

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Canada pledges again to balance budget by 2015
















OTTAWA/NEW YORK (Reuters) – The Canadian government on Friday reiterated its intention to balance its budget by 2015, three days after projecting there would be deficits until 2016-17.


In separate appearances in Quebec City and New York, Prime Minister Stephen Harper and Finance Minister Jim Flaherty were at pains to say they still intended to end the red ink by 2015.













“It remains the government’s plan, intention, to balance the budget prior to the next federal election. The recent economic and fiscal update by the minister indicates we are actually very close to that objective,” Harper told reporters in Quebec City. The next election is in October 2015.


Flaherty’s fall fiscal update on Tuesday had pushed back the target date for eliminating the deficit by a year, to 2016-17, citing a weak global economy.


But the minister said in a speech in New York that the government was on track to balance the budget in the next two to three years, barring major external events, and he later clarified that he intended a balanced budget by 2015.


“The prime minister’s always correct,” he chuckled.


He sought to explain the discrepancy by saying the fiscal update had built in a C$ 3 billion ($ 3 billion) contingency cushion, meaning there was an underlying surplus of C$ 1.2 billion for 2015-16. He said the projection of a C$ 1.8 billion deficit amounted to about half a percent of the C$ 275 billion federal budget.


“There’s lots of water to go under the bridge between now and then,” he said.


The opposition New Democratic Party noted the discrepancy in a release headlined: “Stephen Harper makes stuff up about balancing the budget.”


It pointed out that balancing the budget by the next election was not the same as balancing it by 2016-17.


As it is, even the 2015-16 timetable is a year later than offered in the Conservative campaign for reelection in May 2011. They had promised a balanced budget by 2014-15, followed by major personal income tax relief before the 2015 election.


Flaherty’s timetable drew criticism this week from the Canadian Taxpayers Federation, which said the minister had become expert at kicking the can down the road.


The projections could be thrown out of whack if the United States goes off the fiscal cliff, a set of automatic tax hikes and spending cuts that are to be triggered on January 2 if legislators and the White House cannot agree on a more nuanced budget deal.


Flaherty said U.S. failure to avert the fiscal cliff would cause a significant and immediate decline in Canada’s gross domestic product, and he would counter it.


Referring to a possible economic shock from Europe or the United States, he said: “If that were to happen and if the Canadian economy were to be pushed back into recession with the resulting danger for higher unemployment and the danger always of a prolonged recession, then we would act.”


He added: “We would not stand by and let that happen. The kinds of measure we can take: there are various tax measures we can take, there are measures with respect to stimulus we can take, these are things that we have done before and we can do again.”


On Tuesday, Flaherty spoke of having prepared various contingency plans.


(Additional reporting by Louse Egan; Editing by David Gregorio)


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